💰 Capitalism

Big Picture: Capitalism

Capitalism is an economic system where most businesses and resources are privately owned.

People and companies:

• Decide what to produce
• Set prices
• Compete for profit

The government still has rules, but it does not plan everything.

Key idea: Markets, not the state, guide most economic decisions.

Core Features 🧩

Capitalism usually includes:

• Private property: You can own things and sell them.
• Markets and prices: Buying and selling guide choices.
• Profit motive: People try to earn more than they spend.
• Competition: Businesses rival each other for customers.

Together, these shape how goods and services are produced.

Capitalism vs. Other Systems

Compare:

• Capitalism: Private ownership, market decisions.
• Socialism: More public ownership, government planning.
• Traditional economies: Custom and habit guide production.

Most modern countries are mixed economies, combining markets with government rules, taxes, and public services.

Key Terms to Know

• Capital: Machines, buildings, tools, and money used to produce.
• Entrepreneur: Person who starts a business and takes risks.
• Consumer: Person who buys goods or services.
• Firm: Organization that produces and sells.

Remember: In capitalism, capital is privately owned and used to make profit.